Shiftgig raises $20M more to connect hourly workers with open jobs

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The rise in on-demand services from the likes of Uber, Lyft and Postmates is fuelling a new workforce of freelancers in the service industry who are not tied to single places of employment and can work hours that are more suitable to them. Now a similar kind of flexibility is finding its way into the world of hourly work, too.

Shiftgig — a startup that has built a mobile platform for hourly workers to pick up shifts at local businesses looking for staff to fill gaps in their schedules (Shiftgig=shift work+gig economy) — is today announcing that it has raised $20 million to scale up its marketplace. This round, a Series C, includes a mix of new and existing backers — DRW Venture Capital, FJ Labs, GGV Capital, KDWC Ventures, and an affiliate of William Blair — and brings the total raised by Shiftgig to $56 million. The company is not disclosing its valuation but sources tell us it’s around $150 million post-money.

For now, this puts Shiftgig well ahead of two notable competitors in terms of funds raised for growth. Others in the same space include Workpop and Wonolo, both of which have raised under $10 million to date (see here and here).

Shiftgig’s raise comes about a year after Renren, the “Facebook of China”, led Shiftgig’s last round of $22 million. Since then, the company has been seeing “solid growth”, in the words of Eddie Lou, the CEO and co-founder. Today, there are some 1,500 businesses and 15,000 workers using the platform, which has customers across all 50 states but with a concentration in about 12 cities. (The plan will “certainly” be to use some of the funding to scale that out even more, Lou said.)

Today, Shiftgig works with a wide range of business clients mainly in the food service, hotel, retail, logistics, warehouse, and experiential marketing spaces, Lou said. Interestingly, it’s also been approached by Uber to use the platform but currently does not provide drivers among its staff, Lou said.

The idea is that businesses connect on to the Shiftgig platform to fill any number of shifts. The marketplace accommodates both small businesses needing to fill one or a few shifts, as well as large events looking for 200 people. In all cases, businesses pay for every shift worked, and Shiftgig takes a percentage fee, which varies depending on the size of the order and size of the client.

There has been some scrutiny around how thorough background and credit checks are sometimes for workers in the on-demand economy. In the case of Shiftgig, the company goes through its own set of qualification and vetting checks, which also change over time as businesses rate employees (termed “Specialists” in Shiftgig’s marketplace) after each shift worked that ultimately result in reliability scores for workers.

On top of those checks, Shiftgig also handles weekly payments to Specialists as well as their benefits: Lou said that the company is compliant with the Affordable Care Act and insured with the appropriate worker’s compensation policies.

There is a lot of infrastructure in place today, but it wasn’t always this way. Lou tells me that Shiftgig got its start in 2012 as a web-only social network co-founded by Lou along with Jeff Pieta (who is now Chief Growth Officer) and Sean Casey (who is now Chief Data Officer), connecting small businesses in the service industry with people seeking full-time and part-time jobs. “We were free to use,” he said, which helped the platform scale “exponentially.” (Free has a habit of doing that.) At its peak, it connected 1.4 million job seekers with over 30,000 small businesses.

But in late 2013, the company had stopped growing virally, so it decided to turn on revenue. “We spoke to 25 businesses and many wanted qualified and vetted candidates and/or workers for short-term periods,” he said. “By listening to our customer’s needs, we pivoted the business to an on-demand marketplace connecting businesses with people seeking short term gigs. This time, we built our new product leveraging a smartphone instead of a website.”

The new formula has clearly found a lot of traction with both customers as well as investors.

“Shiftgig is the largest and best temporary staffing startup in the world,” said Fabrice Grinda, co-founder of FJ Labs, in an email to us. “It’s clearly going in the direction of history as more work is being ‘gigified’ as employers and employees both seek greater flexibility.”

“The Shiftgig team continues to execute against its plan by winning enterprise clients that utilize its technology to connect with hourly labor,” said Jeff Richards, Managing Partner, GGV Capital, in a statement. “The company is scaling across multiple verticals and proving that one platform can be winner take all.”

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Crunchbase

OverviewShiftgig is the smartest and easiest way for the hourly workforce and businesses to connect. We're a mobile marketplace that fully vets and background checks workers, which we call Specialists, who can then pick up shifts on our mobile app and work when, where, and for whom they want. Our clients love our platform because they can manage their temporary labor directly from the Shiftgig Business app. …